Refined Regulatory Horizons: Hyperliquid Policy Center’s Five-Point Plan for SEC Crypto Rules

The Hyperliquid Policy Center has officially welcomed the SEC’s attempt to clarify the application of securities law to digital assets, yet warns that the current framework risks creating "unnecessary barriers." In a comprehensive comment published recently, the advocacy group urged the regulator to refine its "Regulation Crypto Assets" proposal to better suit the realities of token developers and modern markets.

Navigating the Decentralization Dilemma

At the heart of the proposal is the long-standing challenge of defining when a digital asset ceases to be a security. The Center highlights that while a token may start as part of a fundraising arrangement, it eventually evolves into a tool used by a vast network of independent participants. To address this, the group is calling for more robust safe harbor protections that offer clear legal immunity once a project has sufficiently matured, ensuring that developers aren't held to archaic standards as their networks decentralize.

Streamlining Distributions and Buybacks

The advocacy group also identified several technical friction points that could hamper market liquidity. Their recommendations include more flexible treatment of administrative steps in token airdrops and clearer guidelines for how tokens trade following exempt distributions. Additionally, the submission pushes for standardized rules regarding token buybacks and a more cohesive alignment between federal and state-level securities mandates, aiming to provide the industry with the predictability it needs to thrive on a national scale.